Tesla Poised to Resume Giga Shanghai Expansion, Paving Way for Next-Gen EV

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Tesla China is reportedly preparing to resume the construction of Gigafactory Shanghai's Phase 3 complex. The move could pave the way for the production of the company's highly anticipated next-generation electric vehicle (EV), which is expected to be more affordable than the Model 3 and Model Y.

Chinese news outlet Late Post, citing sources familiar with the matter, recently reported that Tesla began initial preparations for the expansion back in 2021. At the time, Tesla even reportedly assembled a dedicated team for the project. However, the initiative was reportedly put on hold last year, with staff being reassigned to other departments.

Industry insiders speculate that if successfully completed, Phase 3 will prioritize the production of Tesla's affordable EV, which would be built on the company's next-generation platform. This platform is crucial to Tesla's ambitious goal of achieving an annual production of 20 million vehicles by 2030. It would also be key to the production of Tesla's dedicated Robotaxi, which will be completely driverless.

Gigafactory Shanghai currently reigns as Tesla's most efficient production facility, boasting a remarkable 37-second production time for each vehicle – significantly faster than the 76 seconds currently achieved at Gigafactory Texas. The expected production efficiencies of Tesla's next-generation car built in Giga Shanghai would likely be difficult to match elsewhere.

Previous reports suggested that Giga Shanghai's Phase 3 could double the facility's annual production capacity to 2 million vehicles. As of Tesla's latest Q3 2023 Update Letter, the Shanghai factory has an estimated capacity exceeding 950,000 vehicles per year, the largest among the company's other vehicle factories.

If these recent reports come to fruition, Tesla will soon have two major construction projects in China. Apart from Gigafactory Shanghai's Phase 3 expansion, the company also signed a deal with Shanghai's Lingang authorities earlier this year to build a Megafactory in the area. This Megafactory will focus on producing the Megapack battery, which is Tesla's largest battery storage product.

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